Economic, Environmental, and Social Aspects of OTEC Implementation

Abstract

The financial analyses presented in Chapters 7 and 8 indicate that commercial development of OTEC will have a significant impact on the economics of U.S. energy production and use. Two scenarios for commercial development are examined in this section: 1. Development of OTEC methanol capacity sufficient to replace all U.S. gasoline produced from imported oil. 2. Development of OTEC ammonia capacity sufficient to replace all gasoline used in U.S. transportation. Commercialization of this option implies a project goal to produce methanol plantships with enough total methanol capacity to replace the gasoline used in the United States that is now produced from imported petroleum, 47 billion gallons of gasoline in 1990 (DOE/EIA, 1990). This would require a total of 427 200-MWe plantships, each producing 199 million gallons of methanol per year (1.8 gallons of methanol give the same automobile mileage as 1 gallon of gasoline. We assume financing based on an initial nominal plant investment of $960M (1990$) and an eighth plant investment of $664M. With repeated manufacture, the cost will be reduced to $438M for the 427th plantship, assuming that an experience exponent of 0.93 applies for all production of identical plantships after the first three. The average plant investment for the total production is then $507M. If financial support is maintained to complete the program, the year 2020 is a reasonable target date for achieving the full fuel production capacity. This implies construction of OTEC plantships at an average rate of 17 per year after commercial production is established. This rate could be accommodated in U.S. shipyards with feasible modifications to satisfy specific OTEC requirements. The U.S. shipbuilding facilities are discussed in Section 4.1. In addition to the investments required for OTEC, methanol automobiles must be in production, and distribution systems for methanol must be installed. The associated costs must be included in the financial analysis. Offsetting these costs are the savings resulting from: 1. Large improvements in the U.S. balance of trade through elimination of oil imports. 2. Tax receipts accruing from reinvigorated U.S. shipbuilding and associated manufacturing industries. 3. Economic benefits of stabilized world fuel prices.